HYPE Faces Short-Term Pressure Amid Whale Activity and Token Unlocks

• Hyperliquid’s native token HYPE has fallen nearly 10% in the past week due to sustained selling pressure from a major whale and upcoming token unlocks.
• A major whale linked to Tornado Cash has sold over $8.2 million in HYPE recently, raising concerns about liquidity absorption and price stability.
• Platform user growth and volume reached significant milestones in 2025, but Hyperliquid lost 73% of its market share to emerging competitors like Aster and Lighter.

Hyperliquid’s HYPE token is currently under bearish pressure due to recent whale activity and token unlock events. A top whale has executed multiple large sell trades totaling over $8.2 million in the past few weeks, and approximately 1.3 million HYPE tokens are currently unstaking. These developments are adding short-term supply-side risks as the circulating supply increases.

The broader market environment has also contributed to the price decline. A recent sell-off by Arthur Hayes of his entire HYPE position in September 2025 signaled caution among investors. Protocol buybacks are expected to offset about 17% of the newly unlocked tokens, but uncertainty remains about market absorption of the increased supply.

Despite these headwinds, Hyperliquid’s decentralized futures trading volume reached $2.9 trillion in 2025, and user base expanded from 300,000 to 1.4 million. The platform launched strategic initiatives like USDH, a stablecoin to reduce reliance on external liquidity providers, and HIP-3 to attract developers to build perpetual markets.

How Will Token Unlocks Impact HYPE's Price Stability?

Token unlocks scheduled between January 13 and January 19 are expected to add to the circulating supply of HYPE. Historical whale behavior suggests that a significant portion of these unlocked tokens may enter the market for sale. This could intensify short-term selling pressure, especially if broader market sentiment remains weak. The price is currently testing a critical support level near $23.40, and any further breakdown could trigger deeper corrections.

The platform’s protocol buybacks aim to offset about 17% of the unlocked tokens, but this does not fully address the potential liquidity risk. Analysts are monitoring the next 5–7 days to see whether the market can absorb the increased supply without further price deterioration.

What Strategic Moves Are Helping Hyperliquid Retain Users?

To counter the market share losses, Hyperliquid introduced the CLOB model to improve capital efficiency, USDH to reduce reliance on external liquidity, and HIP-3 to expand market offerings according to analysis. The HYPE token also offers reduced trading fees and increased referral bonuses when staked, which has helped drive user participation and staking activity.

Hyperion DeFi, a publicly listed company holding HYPE, has deployed $50 million in initiatives including validator nodes and HAUS agreements to strengthen the platform’s ecosystem. Despite recent price volatility, staking activity reached $1.37 billion, and futures open interest increased to $1.41 billion, showing continued investor confidence in the platform.

Is HYPE’s Price Decline a Sign of Deeper Market Stress?

The recent price decline of HYPE coincides with a broader market downturn, including declines in Bitcoin and Ethereum, leading traders to reduce leverage and exposure. Capital rotation to new DEXs like Lighter’s LIT token on Ethereum Layer 2 has further increased short-term pressure on HYPE. On-chain data show changes in derivatives positioning and funding rates on Hyperliquid’s perpetual DEX, which have led to liquidations and stop-loss orders.

While the price decline raises questions about deeper market stress, platform activity remains elevated. Whale activity, however, shows increased deposits and purchases, signaling long-term confidence in the platform. Investors are advised to monitor both short-term liquidity risks and long-term strategic developments as the market evolves.